Feature
Untitled Page
5 reasons to buy a new home – now
Why purchase a new home during these tough times? Among other reasons: Interest rates are low, and builders are motivated to deal.
By Amy BentleyPublished: October 01, 2008
It may be a buyer's market on the home front, but what about financing? Click here to read more.
Have you ever noticed the different vibe you get touring an existing home versus a new one? The vibe you get from a lived-in house depends on the owners. It could be dark and moody, or bright and cheery – and too much of either is no good. But the new home – well, if you’re looking at a model, it’s usually perfectly staged with fine furnishings and a pleasing-to-all décor.
Beyond what your emotions tell you, solid reasons exist in favor of buying a new home now. Prices for new homes are more on par than ever with existing homes, and some experts say they could drop even more over the next 12 to 18 months. And new homes today are generally more energy-efficient than older ones.
“It’s a great buyer’s market right now, and we want to be very competitive with prices and incentives,” says Ted McKibbin, president of the Orange County Division for Standard Pacific Homes, which is selling houses in seven new Orange County communities.
Here are five good reasons to buy a new home now.
1. Money is on your side.
We’re seeing a perfect combination of financial conditions for buying a new dwelling. Home prices are down, mortgage interest rates are low and many builders are offering cash incentives that people can use to purchase upgrades, pay for closing costs or buy down a lower interest rate on their loan.
Historically, mortgage rates have ranged from 5.23 percent to 18.45 percent, according to guidetolenders.com. The typical rate for a 30-year fixed loan is now about 6.2 percent for
borrowers with a proven, stable income and good credit. But rates won’t stay that low forever.
In addition, homeowners usually can’t offer the incentives or financing options that builders can. Centex Homes, for example, offered a $24,000 cash incentive in August to buyers at the Sagecrest town homes development in Orange, where prices range from $373,000 for a 1,323-square-foot unit to $432,000 for a four-bedroom, 1,814-square-foot unit.
“There is a tremendous pent-up demand, and people have been waiting. Renters have been stacking up for four years,” says Realtor Jim Moodey, who is selling at the Sagecrest development.
Some builders are even coming up with can’t-lose promises. Standard Pacific, for example, offers a Value Protection Program. If the price of your new home drops after you buy it, or if the value of the incentive package increases, the builder will adjust the home price or incentive package appropriately. You’ll get the lower home price or the greater incentive value, says McKibbin.
2. More design choices.
Ok, so green ivy-leaf wallpaper and knotty-pine cabinets don’t rank among your favorites for kitchen decor. And what about those “pretty” pink walls in the children’s bedrooms? They won’t cut it, because your two kids happen to be boys. You already have numbers dancing in your head as you calculate the cost to remodel, repaint and redecorate that older home you’re looking at.
When you buy an existing home, you can either spend a small fortune making it yours or just live with someone else’s choices.
Not so with a new home. The buyers decide on design, color and material options for counters, flooring, window coverings, cabinets and more. Buyers can custom tailor a new home to suit their tastes and needs.
“Modern floorplans are better, too. You have large great rooms off the kitchen and no hidden kitchens,” adds Julie Senter, public affairs director for the Building Industry Association of Southern California.
Put it all together, and it’s a great perk for buyers.
“They get to walk in the door and customize it, and these are people who could never afford a custom home, but they feel like they have one,” says Michelle Pease, a South Orange County Realtor with ReMax.
Sometimes builders let the buyer alter the home’s layout, too, during the construction phase. Want to convert an extra bedroom into an office? Sure. Add space for another car in the garage? OK. And if you buy early enough, you can even choose the lot in the tract on which to build your home.
3. Low maintenance – and a warranty.
New homes are built with state-of-the-art materials that make them virtually maintenance-free for years. Consider the recent repair bills for Moodey and his wife, who live in a 31-year-old home in Anaheim Hills: $18,000 for a new roof, $4,000 to fix a broken water main, $8,000 for a new driveway to replace the old one that had been torn up by invasive tree roots. “The maintenance is killing us,” says Moodey.
Buyers of existing homes typically rely on an inspector to find defects that you can ask the sellers to fix before escrow closes. But an inspector won’t find a leaky roof during the summer. Come the rainy season, you’ll have to fix that leak, plus the water damage.
With a new home, you know who the builder is, and you know where to find him, says Senter. You also get a warranty. In California, homebuilders are required to guarantee the structure for 10 years.
“Many new homebuilders are national companies now. They have paid a lot more attention to customer service,” says Senter.
And that means peace of mind, says Steve Ruffner, president of the Southern California Coastal Division for KB Home: “Buying a new home from KB Home gives that buyer a 50-year-old company, and we’re going to stand behind that home. You don’t have to budget for basic improvements to your house.”
4. More energy-efficient and “healthy” homes.
Whether it’s better insulation, a design that welcomes in more natural light or state-of-the-art, energy-efficient appliances, new homes are a good bet if you’re in the market for an environmentally friendly place to live.
Appliance manufacturers introduce new models every year, and homebuilders typically offer the most modern gadgets. Utility company and government requirements to increase energy efficiency have forced builders to find new and better ways to make new homes more energy efficient, and buyers can get rebates for that. Most new homes have dual-pane windows that provide better insulation from the cold and heat, and they have more efficient central heating and air conditioning systems.
KB Home, a leader in building more energy-efficient residences, this year began outfitting new dwellings with Energy Star-qualified refrigerators, dishwashers and laundry appliances from Whirlpool. “That saves a lot of money every month on your utilities,” says Ruffner.
In its first-ever sustainability report, issued in July, KB Home announced that, beginning next year, it will use paints and carpeting that are low in volatile organic compounds (VOCs), which are chemicals that can cause adverse health effects such as eye irritation, headaches and kidney damage.
And Standard Pacific Homes is offering tankless water heaters in many new homes, saving water and energy, says McKibbin. The builder also puts its new homes through an energy-rating inspection, he says.
The Irvine Community Development Co.’s Villages of Irvine offers new homes with health advantages, too. According to the company’s Web site, villagesofirvine.com: “Asbestos is no longer used in shingles, floor tiles, ceilings or insulation. Lead is usually no longer used in paint, and formaldehyde emissions have been virtually eliminated from plywood and particle board.”
5. Wired for modern technology.
Video cameras, sensors, automated lighting and wireless Internet systems work better when the technology is integrated from the get-go. It can be a costly and difficult wiring nightmare upgrading an older home to accommodate modern technology.
Standard Pacific’s new homes come digital-ready for a variety of systems, and, if you want, you can even manage your new home’s systems from a remote site.
“With the abundance of home computers, home media centers, surround sound and other modern conveniences,” the Villages of Irvine Web site touts, “new homes are
being wired to accommodate state-of-the-art technology that wasn’t available when many existing homes were built.”
Amy Bentley is the former editor of Southern California Home & Outdoor magazine.
|
||||
|
Have you ever noticed the different vibe you get touring an existing home versus a new one? The vibe you get from a lived-in house depends on the owners. It could be dark and moody, or bright and cheery – and too much of either is no good. But the new home – well, if you’re looking at a model, it’s usually perfectly staged with fine furnishings and a pleasing-to-all décor. Beyond what your emotions tell you, solid reasons exist in favor of buying a new home now. Prices for new homes are more on par than ever with existing homes, and some experts say they could drop even more over the next 12 to 18 months. And new homes today are generally more energy-efficient than older ones. “It’s a great buyer’s market right now, and we want to be very competitive with prices and incentives,” says Ted McKibbin, president of the Orange County Division for Standard Pacific Homes, which is selling houses in seven new Orange County communities. Here are five good reasons to buy a new home now. 1. Money is on your side. We’re seeing a perfect combination of financial conditions for buying a new dwelling. Home prices are down, mortgage interest rates are low and many builders are offering cash incentives that people can use to purchase upgrades, pay for closing costs or buy down a lower interest rate on their loan. Historically, mortgage rates have ranged from 5.23 percent to 18.45 percent, according to guidetolenders.com. The typical rate for a 30-year fixed loan is now about 6.2 percent for borrowers with a proven, stable income and good credit. But rates won’t stay that low forever. In addition, homeowners usually can’t offer the incentives or financing options that builders can. Centex Homes, for example, offered a $24,000 cash incentive in August to buyers at the Sagecrest town homes development in Orange, where prices range from $373,000 for a 1,323-square-foot unit to $432,000 for a four-bedroom, 1,814-square-foot unit. “There is a tremendous pent-up demand, and people have been waiting. Renters have been stacking up for four years,” says Realtor Jim Moodey, who is selling at the Sagecrest development. Some builders are even coming up with can’t-lose promises. Standard Pacific, for example, offers a Value Protection Program. If the price of your new home drops after you buy it, or if the value of the incentive package increases, the builder will adjust the home price or incentive package appropriately. You’ll get the lower home price or the greater incentive value, says McKibbin. 2. More design choices. Ok, so green ivy-leaf wallpaper and knotty-pine cabinets don’t rank among your favorites for kitchen decor. And what about those “pretty” pink walls in the children’s bedrooms? They won’t cut it, because your two kids happen to be boys. You already have numbers dancing in your head as you calculate the cost to remodel, repaint and redecorate that older home you’re looking at. When you buy an existing home, you can either spend a small fortune making it yours or just live with someone else’s choices. Not so with a new home. The buyers decide on design, color and material options for counters, flooring, window coverings, cabinets and more. Buyers can custom tailor a new home to suit their tastes and needs. “Modern floorplans are better, too. You have large great rooms off the kitchen and no hidden kitchens,” adds Julie Senter, public affairs director for the Building Industry Association of Southern California. Put it all together, and it’s a great perk for buyers. “They get to walk in the door and customize it, and these are people who could never afford a custom home, but they feel like they have one,” says Michelle Pease, a South Orange County Realtor with ReMax. Sometimes builders let the buyer alter the home’s layout, too, during the construction phase. Want to convert an extra bedroom into an office? Sure. Add space for another car in the garage? OK. And if you buy early enough, you can even choose the lot in the tract on which to build your home. 3. Low maintenance – and a warranty. New homes are built with state-of-the-art materials that make them virtually maintenance-free for years. Consider the recent repair bills for Moodey and his wife, who live in a 31-year-old home in Anaheim Hills: $18,000 for a new roof, $4,000 to fix a broken water main, $8,000 for a new driveway to replace the old one that had been torn up by invasive tree roots. “The maintenance is killing us,” says Moodey. Buyers of existing homes typically rely on an inspector to find defects that you can ask the sellers to fix before escrow closes. But an inspector won’t find a leaky roof during the summer. Come the rainy season, you’ll have to fix that leak, plus the water damage. With a new home, you know who the builder is, and you know where to find him, says Senter. You also get a warranty. In California, homebuilders are required to guarantee the structure for 10 years. “Many new homebuilders are national companies now. They have paid a lot more attention to customer service,” says Senter. And that means peace of mind, says Steve Ruffner, president of the Southern California Coastal Division for KB Home: “Buying a new home from KB Home gives that buyer a 50-year-old company, and we’re going to stand behind that home. You don’t have to budget for basic improvements to your house.” 4. More energy-efficient and “healthy” homes. Whether it’s better insulation, a design that welcomes in more natural light or state-of-the-art, energy-efficient appliances, new homes are a good bet if you’re in the market for an environmentally friendly place to live. Appliance manufacturers introduce new models every year, and homebuilders typically offer the most modern gadgets. Utility company and government requirements to increase energy efficiency have forced builders to find new and better ways to make new homes more energy efficient, and buyers can get rebates for that. Most new homes have dual-pane windows that provide better insulation from the cold and heat, and they have more efficient central heating and air conditioning systems. KB Home, a leader in building more energy-efficient residences, this year began outfitting new dwellings with Energy Star-qualified refrigerators, dishwashers and laundry appliances from Whirlpool. “That saves a lot of money every month on your utilities,” says Ruffner. In its first-ever sustainability report, issued in July, KB Home announced that, beginning next year, it will use paints and carpeting that are low in volatile organic compounds (VOCs), which are chemicals that can cause adverse health effects such as eye irritation, headaches and kidney damage. And Standard Pacific Homes is offering tankless water heaters in many new homes, saving water and energy, says McKibbin. The builder also puts its new homes through an energy-rating inspection, he says. The Irvine Community Development Co.’s Villages of Irvine offers new homes with health advantages, too. According to the company’s Web site, villagesofirvine.com: “Asbestos is no longer used in shingles, floor tiles, ceilings or insulation. Lead is usually no longer used in paint, and formaldehyde emissions have been virtually eliminated from plywood and particle board.” 5. Wired for modern technology. Video cameras, sensors, automated lighting and wireless Internet systems work better when the technology is integrated from the get-go. It can be a costly and difficult wiring nightmare upgrading an older home to accommodate modern technology. Standard Pacific’s new homes come digital-ready for a variety of systems, and, if you want, you can even manage your new home’s systems from a remote site. “With the abundance of home computers, home media centers, surround sound and other modern conveniences,” the Villages of Irvine Web site touts, “new homes are being wired to accommodate state-of-the-art technology that wasn’t available when many existing homes were built.” Amy Bentley is the former editor of Southern California Home & Outdoor magazine. |
||||